Ex-NYSE chairman Grasso ordered to refund part of pay

[JURIST] The New York State Supreme Court [official website] Thursday ordered former New York Stock Exchange [corporate website] chairman Richard A. Grasso [BBC profile] to pay back a major portion of the compensation paid to him while he held that position between 1995 and 2003. Justice Charles E. Ramos [official profile] held that Grasso "failed in [his] duty" to keep the other directors appraised of his ballooning compensation package. Ramos' opinion [PDF] also rejected Grasso's claim to a $95 million severance package and his countersuit against current NYSE chair John S. Reed [Wikipedia profile]. The New York state attorney general's office now says that Grasso must pay back over $80 million.

For the past 3 years, Grasso has fought [JURIST report] New York Attorney General Eliot Spitzer [official profile] over Grasso's controversial $139.5 million dollar compensation arrangement. Spitzer has contended [complaint] that the amount was unreasonably high and violated state non-profit law. Grasso has countered that his fellow directors were aware of his pay and approved it. Ramos' ruling that "Year after year, [the other directors] made decisions to pay [Grasso] without knowing his true compensation.” would seem to severely undercut Grasso's defense. Spitzer's charge regarding New York's not-for-profit law is scheduled to be addressed in a subsequent trial this fall, but those proceedings are now likely to be delayed while this decision is appealed. Two of Ramos' other decisions in the case have been similarly delayed [JURIST report]. The New York Times has more.



 

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